Afreximbank initiates $15m scheme to source projects

Nigeria and other African countries, as well as their entrepreneurs, would soon enjoy a first treat of their projects and investment ideas, aimed at making them attractive and feasible, courtesy of the African Export-Import Bank (Afreximbank).

The bank unveiled the initiative as a way of increasing the availability of viable and well-prepared projects in Africa, as well as making such projects bankable and attractive to investors, with a seed capital of $15 million.

Tagged, “Afreximbank Project Preparation Facility” (APPF), the scheme, which was launched in Johannesburg, South Africa, on the sidelines of the just-concluded Africa Investment Forum, would provide technical and financial support to early stage companies.

The support would specifically be in the preparation and development of projects from conceptual stage to bankability stage- the point at which such projects can attract interest from equity investors and debt financiers.

The APPF has become necessary to nurture ideas that had hitherto been described non-bankable and risky by commercial banks, especially in Nigeria, due to poor project structure, lack of financial plan and reporting skills.

Afreximbank President, Prof. Benedict Oramah, said the facility would support transactions that seek to implement logistical platforms that support export growth and diversification.

It would also provide support for organisations that facilitate the assimilation of African commodities into global value chains or increase the volume and flow of tradeable goods and services along Africa’s trade corridors.

According to him, the facility supports Afreximbank’s mandate and strategy, which seeks to promote intra-African trade and industrialisation, and export development activities in the continent.

The Chief Executive Officer, Harith General Partners, a pan-African infrastructure developer, Tshepo Mahloele, said APPF is a “bold step in the right direction to assist Africa to unleash its full potential through de-risking of investments early on in the project preparation cycle.”

Mahloele, who noted that the project preparation step was often overlooked in the pursuit of quick returns, said his company had ensured efficient and professional preparation of infrastructure projects.

According to him, Africa has long been at the mercy of poor planning, leading to infrastructure project backlogs that has limited GDP growth by at least two per cent yearly.

The company’s Project Finance Manager, Zitto Alfayo, said that the APPF would be operated on full cost recovery basis and would be primarily open to African governments, public-private partnerships and private companies.

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